Eli's Hospice Insider

LOS is on the rise again.

Chances of you getting a decent payment rate increase next year are slimmer, thanks to a recent report from the Medicare Payment Advisory Commission once again urges Congress to freeze their payment rates.

Increases in key statistics ranging from profit margin to length of stay to live discharges may convince lawmakers to listen when the influential advisory body to Congress advocates eliminating any payment update for the industry in 2018. Those 2016 stats, included in MedPAC's annual report to Congress released last month, include:

• The number of providers increased 4.4 percent from the year earlier to total 4,382.
• The number of for-profits increased by more than 7 percent, while nonprofit and government hospices decreased by 2 percent.
• Average LOS increased 1.3 percent to 87.8 days and median LOS increased from 17 to 18 days.
• For-profits averaged an LOS of 106 days compared to 56 days for nonprofits.
• More than half of Medicare hospice spending was for stays exceeding 180 days.
• Patients in assisted living facilities had "markedly longer" LOSs than patients in other settings with the same diagnosis.
• Profit margin for 2015 was 10 percent, up from 8.2 percent a year earlier.
• Projected profit margin for 2018 is 8.7 percent.
• Medicare spending grew 6 percent to $16.8 billion. That follows the 5.5 percent increase in 2015 to $15.9 billion, and compares to $2.9 billion in 2000.
• Seventy-three percent of hospice users had a noncancer diagnoses, compared to 72 percent in the year earlier and 48 percent in 2000.
• About 49.7 percent of Medicare beneficiaries used hospice, up from 48.6 percent in 2015 and 27.9 percent in 2000.
• Live discharges ticked up to 16.9 percent from 16.7 percent in 2015. It's the first increase in four years, with 2013 rates at 18.4 percent and 2014 rates at 17.2 percent.
• The ratio of hospices exceeding their per beneficiary caps in 2015 increased to 12.3 percent, compared to 12.2 percent in 2014, 10.7 percent in 2013, 11.0 percent in 2012, and 2.6 percent in 2000.
• Costs reported for Routine Home Care fell under Medicare's payment rate for the service, while costs for the other three service levels exceeded their payment rates.
• A rate freeze in 2019 would reduce Medicare spending by up to $750 million the first year and up to $5 billion over five years, MedPAC notes.

Important: "Hospices better be cognizant of what is reported, as well as the accuracy of what is reported, in Medicare cost report filings," warns The Health Group in Morgantown, West Virginia. The differences in reported costs and payment rates may lead to "rebalancing" between the four hospice services, the consulting firm says in its newsletter.

"The cost reports also represent the source for assessment of hospice margins," The Health Group points out.

RN Visits Tick Up Under Payment Reform

The jury is still out on whether Medicare's hospice payment reform model implemented last year is fixing the benefit's perceived problems, but the MedPAC report does contain one encouraging statistic.

In 2016, Medicare paid hospice providers roughly $120 million for registered nurse and social worker visits in the last seven days of life, MedPAC notes in the report. Medicare makes those payments under the Service Intensity Add-on provision that began in January 2016.

"The average number of nurse visits per day appears to have increased slightly (from 0.59 visits per day to 0.61 visits per day) during the last 7 days of life," the advisory body to Congress says.

Caveat: Nurse visits MedPAC used included both registered nurse and licensed practical nurse visits, the report explains. "Although the new payment system makes additional payments only for RN (not LPN) visits in the last days of life, we have included both types of visits in this chart because data specific to RNs are not available for 2015," the report says.

While nurse visits increased slightly, "at the same time, the average length of nurse visits during the last days of life appears to have declined slightly," from about 75 minutes to 72 minutes per visit, MedPAC points out.

"Social worker visits in the last days of life were less frequent and changed little during this period," MedPAC adds.